UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2002

Commission file number 1-10466

The St. Joe Company
(Exact name of registrant as specified in its charter)

Florida

59-0432511

(State or other jurisdiction of

(I.R.S. Employer

incorporation or organization)

Identification No.)

Suite 400, 1650 Prudential Drive, Jacksonville, Florida

32207

(Address of principal executive offices)

(Zip Code)

(904) 396-6600
(Registrants telephone number, including area code)

None
(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(D) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
YES [ X ] NO [ ]

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 10, 2002, there were 96,606,971 shares of common stock, no par
value, issued and 80,485,422 outstanding, with 16,121,549 shares of treasury
stock.

The accompanying unaudited interim financial statements have been prepared
pursuant to the rules and regulations for reporting on Form 10-Q. Accordingly,
certain information and footnotes required by accounting principles generally
accepted in the United States of America for complete financial statements are
not included herein. The interim statements should be read in conjunction with
the financial statements and notes thereto included in the Companys latest
Annual Report on Form 10-K/A. In the opinion of the Company, the accompanying
unaudited consolidated financial statements contain all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly the financial
position as of March 31, 2002 and December 31, 2001 and the results of
operations and cash flows for the three-month periods ended March 31, 2002 and
2001. The results of operations and cash flows for the three-month periods
ended March 31, 2002 and 2001 are not necessarily indicative of the results
that may be expected for the full year.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Long-lived assets

The Company reviews its long-lived assets for impairment whenever events
or changes in circumstances indicate that the carrying amount of an asset may
not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by which
the carrying amount exceeds the fair value of the asset. The Company recorded
no impairment loss during the quarters ended March 31, 2002 and 2001.

In October 2001, the Financial Accounting Standards Board issued FASB
Statement No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets (FAS 144). FAS 144 addresses issues relating to the implementation of
FASB Statement No. 121, Accounting for the Impairment of Long-lived Assets and
for Long-Lived Assets to Be Disposed of (FAS 121) and develops a single
accounting method under which long-lived assets that are to be disposed of by
sale are measured at the lower of book value or fair value, less cost to sell.
It also established criteria beyond that previously specified in FAS 121 to
determine when a long-lived asset is held for sale, including a group of assets
and liabilities that represents the unit of accounting for a long-lived asset
classified as held for sale. Among other things, those criteria specify that
(a) an asset must be available for immediate sale in its present condition
subject only to terms that are usual and customary for sales of such assets and
(b) the sale of the asset must be probable, and its transfer expected to
qualify for recognition as a completed sale, within one year, with certain
exceptions. Additionally, FAS 144 expands the scope of discontinued operations
to include all components of an entity with operations that 1) can be
distinguished from the rest of the entity and 2) will be eliminated from the
ongoing operations of the entity in a disposal transaction.

The Company has adopted FAS 144 as of January 1, 2002 and, therefore, the
results of components of the Company that meet the criteria 1) and 2) above,
have been accounted for as discontinued operations in accordance with FAS 144.

Goodwill

In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 141, Business Combinations
(FAS 141), and Statement of Financial Accounting Standards No. 142, Goodwill
and Other Intangible Assets (FAS 142). FAS 141 requires that the purchase
method of accounting be used for all business combinations initiated or
completed after June 30, 2001. FAS 141 also specifies criteria that must be
met by intangible assets acquired in a purchase method business combination in
order for them to be recognized and reported apart from goodwill. FAS 142
requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead tested for impairment at least annually in accordance
with the provisions of FAS 142.

As a result of FAS 142, the Company ceased to amortize $143.4 million of
goodwill as of January 1, 2002. In lieu of amortization, the Company is
required to perform an initial impairment review of all goodwill in 2002 and an
annual impairment review thereafter. The Company has begun its initial
review and thus far has found no indication of impairment.

Earnings Per Share

Earnings per share (EPS) are based on the weighted average number of
common shares outstanding during the period. Diluted EPS assumes options to
purchase shares of common stock have been exercised using the treasury stock
method.

Through May 2001, the Companys Board of Directors authorized a total of
$500 million for the repurchase of the Companys outstanding common stock from
time to time on the open market (the St. Joe Stock Repurchase Program). On
December 6, 2000, the Company entered into an agreement with the Alfred I
DuPont Testamentary Trust (the Trust), the majority stockholder of the
Company, and the Trusts beneficiary, The Nemours Foundation (the
Foundation), to participate in the St. Joe Stock Repurchase Program for a
90-day period. This agreement was renewed for two additional 90-day periods.
The last of these agreements expired on September 6, 2001 and has not been
renewed. During the first quarter of 2002, a total of 78,000 shares were
repurchased on the open market. As of March 31, 2002, a total of 12,082,366
shares have been repurchased on the open market and 4,001,400 shares have been
repurchased from the Trust. In addition, during the first quarter of 2002, the
Company issued 893,280 shares upon the exercise of stock options.

Weighted average basic and diluted shares, taking into consideration
shares issued, weighted average options used in calculating EPS and treasury
shares repurchased for each of the periods presented are as follows:

Three Months Ended March 31,

2002

2001

Basic

79,836,801

82,939,359

Diluted

82,974,001

86,012,932

Comprehensive Income

The Companys comprehensive income differs from net income due to changes
in the net unrealized gains on investment securities available-for-sale and
derivative instruments. For the three months ended March 31, 2002 and 2001,
total comprehensive income was approximately $11.1 million and $21.0 million,
respectively.

Supplemental Cash Flow Information

The Company paid $3.2 million and $2.8 million for interest in the first
three months of 2002 and 2001, respectively. The Company received income tax
refunds of $(1.2) million, net of payments made, in the first three months of
2002 and, for the first three months of 2001, paid $0.8 million for income
taxes. The Company capitalized interest expense of $1.1 million and $1.6
million the first three months of 2002 and 2001, respectively.

Cash flows related to residential real estate development activities are
included in operating activities on the statements of cash flows.

The Companys non-cash activities included the settlement of a portion of
its Forward Sale Contracts (Note 7). The Company transferred stock with a fair
value of $74.3 million to a financial institution and settled hedge instruments
with a fair market value of $27.1 million, which reduced the debt associated
with the sale of the equity securities by $97.0 million.

As a result of rapid consolidation in the residential real estate services
business, the Company had the opportunity to sell Arvida Realty Services
(ARS), its wholly-owned subsidiary, at a significant increase in value. On
April 17,2002, the Company completed the sale of ARS, its residential real
estate services segment, to Cendant Corporations subsidiary, NRT, Inc., for
approximately $170 million, which includes payment for working capital of ARS
at April 17, 2002 of approximately $12 million, in an all cash transaction.
Accordingly, the Company has reported its residential real estate services
operations as discontinued operations for the quarters ended March 31, 2002 and
2001. Revenues from ARS were $63.7 million and $53.8 million for the three
months ended March 31, 2002 and 2001, respectively. Net income for ARS was
$2.0 million and $0.1 million for the three months ended March 31, 2002 and
2001, respectively.

The major classes of assets and liabilities of ARS, which are reported as held
for sale at March 31, 2002, are as follows (in thousands):

Assets:

Cash, cash equivalents and short-term investments

$

38,501

Mortgage loans held for sale

23,751

Property, plant and equipment and other assets

17,693

Goodwill

92,305

Total assets

$

172,250

Liabilities:

Debt

$

41,193

Other liabilities

21,199

Total liabilities

$

62,392

Commercial real estate

The commercial real estate segment sold two office buildings during the first
quarter of 2002 for proceeds of $1.6 million, resulting in a pretax gain of
$0.3 million, or $0.2 million net of tax. Revenues from the two commercial
office buildings were less than $0.1 million for the three months ended March
31, 2002 and 2001. Net operating income from the two commercial office
buildings was less than $0.1 million for the three months ended March 31, 2002
and 2001.

Included in operating property are the Companys timberlands, and land and
buildings used for commercial rental purposes. Development property consists
of community residential land and property currently under development.
Investment property is the Companys land held for future use.

5. GOODWILL

On January 1, 2002, the Company adopted FASB Statement No. 141, Business
Combinations (FAS 141), and FASB Statement No. 142, Goodwill and Other
Intangible Assets (FAS 142). As a result of FAS 142, the Company ceased to
amortize $143.4 million of goodwill as of January 1, 2002. Following is a
presentation of net income amounts as if FAS 142 had been applied for all
periods presented. (Dollars in thousands, except for per share amounts)

For the quarter ended March 31,

2002

2001

Reported net income

$

74,370

$

11,028

Add back: Goodwill amortization



1,477

Adjusted net income

$

74,370

$

12,505

Basic earnings per share:

Reported net income

$

0.93

$

0.13

Goodwill amortization



0.02

Adjusted net income

$

0.93

$

0.15

Diluted earnings per share:

Reported net income

$

0.90

$

0.13

Goodwill amortization



0.02

Adjusted net income

$

0.90

$

0.15

6. DEBT

Long-term debt consisted of the following (in thousands):

March 31, 2002

December 31, 2001

Medium-term notes

$

175,000

$



Minimum liability owed on sale of equity securities

36,863

131,241

Senior revolving credit agreement, unsecured

15,000

205,000

Debt secured by certain commercial and residential
property

137,547

101,516

Various secured and unsecured notes payable

4,535

4,620

Revolving credit agreement, warehouse line and
other debt of discontinued operation

On February 7, 2002, the Company issued a series of senior notes in a
private placement with an aggregate principal amount of $175.0 million. The
maturities of the notes are as follows: 3 Year  $18.0 million, 5 Year  $67.0
million, 7 Year  $15.0 million, 10 Year  $75.0 million. The notes bear fixed
rates of interest ranging from 5.64%  7.37% and interest will be payable
semiannually. Upon receipt of proceeds, the Company partially paid down its
$250.0 million line of credit. The notes contain financial covenants similar to
those in its $250.0 million line of credit.

On February 26, 2002, the Company settled $97.0 million of its minimum
liability owed on sale of equity securities by delivering shares of equity
securities to a major financial institution.

On March 25, 2002, the Company entered into a new fixed-rate debt
agreement, in the amount of $26 million, secured by a mortgage on a commercial
building. The note bears interest at a rate of 7.05% and matures on April 1,
2012.

7. MARKETABLE SECURITIES AND DERIVATIVE INSTRUMENTS

The Company entered into three-year forward sale contracts (Forward Sale
Contracts) with a major financial institution leading to the ultimate
disposition of its investments in equity securities. Under the Forward Sale
Contracts, the Company received approximately $111.1 million in cash and is
obligated to settle the forward transaction by October 15, 2002 by delivering
either cash or a number of the equity securities to the financial institution.
The agreement permits the Company to retain an amount of the securities that
represents appreciation of up to 20% of their value on October 15, 1999 should
the value of the securities increase. The securities have been recorded at fair
value on the balance sheet and the related unrealized gain, net of tax, has
been recorded in accumulated other comprehensive income. At the inception of
the transaction, the Company recorded a liability in long-term debt for
approximately $111.1 million, which has been increased as interest expense is
imputed at an annual rate of 7.9%. The liability will also increase by the
amount, if any, that the securities increase beyond the 20% that the Company
retains. In addition, the Forward Sale Contracts have been designated as a fair
value hedge of the marketable securities under FASB Statement No. 133,
Accounting for Derivative Instruments and Hedging Activities, as amended (FAS
133).

On February 26, 2002, the Company settled a portion of the Forward Sale
Contracts by delivering equity securities to the financial institution. The
liability related to the contracts that were settled was $97.0 million at the
time of settlement and the resulting gain that was recognized in the first
quarter of 2002 was $94.7 million pre-tax, $61.6 million, net of tax. The
balance of the liability, if held to maturity on October 15,
2002 will be $38.3
million, plus any appreciation in the securities beyond the first 20%. The net
cash received at settlement was $1.5 million.

With respect to the remaining securities, the fair value of the Forward
Sale Contracts decreased by $6.0 million to $2.8 million during the first
quarter of 2002. The net impact to the statement of income for the period was
a gain of $0.9 million, which was included in other income and represents the
time value component of the change in fair value of the Forward Sale Contracts.
The Company excludes this amount from its assessment of hedge effectiveness of
the Forward Sale Contracts under FAS 133.

8. SEGMENT INFORMATION

The Company conducts primarily all of its business in five reportable
operating segments, which are community residential development, commercial
real estate development and services, land sales, forestry and transportation.
The Companys former residential real estate services segment has been reported
as a discontinued operation following the Companys decision to sell ARS.
Intercompany transactions have been eliminated. The Company evaluates a
segments performance based on EBITDA. EBITDA is defined as earnings before
interest cost, income taxes, depreciation and amortization, and is net of the
effects of minority interests. EBITDA excludes gains (losses) from discontinued
operations except for gains (losses)
from sales of assets which are classified as discontinued operations under the provisions
of FAS 144 and are sold in

in the normal course of business. EBITDA also
excludes gains (losses) on sales of nonoperating assets. EBITDA is
considered a key financial measurement in the industries that the Company
operates. The segment labeled other primarily consists of investment income,
net of corporate general and administrative expenses. Also included in the
segment labeled other are the revenues and costs related to the hospitality
development group. The Companys reportable segments are strategic business
units that offer different products and services. They are each managed
separately and decisions about allocations of resources are determined by
management based on these strategic business units.

The Company and its affiliates are involved in litigation on a number of
matters and are subject to certain claims which arise in the normal course of
business, none of which, in the opinion of management, is
expected to have a material adverse effect on the Companys consolidated
financial position, results of operations or liquidity.

The Company has retained certain self-insurance risks with respect to
losses for third party liability, workers compensation, property damage, group
health insurance provided to employees and other types of insurance.

The Company is jointly and severally liable as guarantor on five credit
obligations entered into by partnerships in which the Company has equity
interests. The maximum amount of the guaranteed debt totals $100.1 million; the
amount outstanding at March 31, 2002 totaled $84.1 million. In addition, the
Company has indemnification agreements from some of its partners requiring that
they will cover a portion of the debt that the Company is guaranteeing.

The Company is subject to costs arising out of environmental laws and
regulations, which include obligations to remove or limit the effects on the
environment of the disposal or release of certain wastes or substances at
various sites including sites which have been previously sold. It is the
Companys policy to accrue and charge against earnings environmental cleanup
costs when it is probable that a liability has been incurred and an amount is
reasonably estimable. As assessments and cleanups proceed, these accruals are
reviewed and adjusted, if necessary, as additional information becomes
available.

The Company is currently a party to, or involved in, legal proceedings
directed at the cleanup of Superfund sites. The Company has accrued an
allocated share of the total estimated cleanup costs for these sites. Based
upon managements evaluation of the other potentially responsible parties, the
Company does not expect to incur additional amounts even though the Company has
joint and several liability. Other proceedings involving environmental matters
such as alleged discharge of oil or waste material into water or soil are
pending against the Company. It is not possible to quantify future
environmental costs because many issues relate to actions by third parties or
changes in environmental regulation. However, based on information presently
available, management believes that the ultimate disposition of currently known
matters will not have a material effect on the consolidated financial position,
results of operations or liquidity of the Company. Environmental liabilities
are paid over an extended period and the timing of such payments cannot be
predicted with any confidence. Aggregate environmental-related accruals were
$4.5 million and $4.6 million as of March 31, 2002 and December 31, 2001,
respectively.

MANAGEMENTS DISCUSSION AND ANALYSIS OF THE CONSOLIDATED
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This report may contain forward-looking statements as defined by the
Private Securities Litigation Reform Act of 1995. These statements can be
identified by the fact that they do not relate strictly to historical or
current facts. Forward-looking statements often use words such as anticipate,
expect, estimate, intend, plan, goal, believe or other words of
similar meaning.

Forward-looking statements give the Companys current expectations or
forecasts of future events, circumstances or results. The Companys disclosure
in this report, including in the MD&A section, contains forward-looking
statements. The Company may also make forward-looking statements in our other
documents filed with the SEC and in other written materials. In addition, the
Companys senior management may make forward-looking statements orally to
analysts, investors, representatives of the media and others.

Any forward-looking statements made by or on behalf of the Company speak
only as of the date they are made. The Company does not update forward-looking
statements to reflect the impact of circumstances or events that arise after
the date the forward-looking statement was made. The reader should, however,
consult any further disclosures of a forward-looking nature the Company may
make in its other documents filed with the SEC and in other written materials

All forward-looking statements, by their nature, are subject to risks and
uncertainties. The Companys actual future results may differ materially from
those set forth in the Companys forward-looking statements. In particular, but
without limitation, discussions regarding (a) the size and number of commercial
buildings and residential units; (b) development timetables, development
approvals and the ability to obtain approvals; (c) anticipated price ranges of
developments; (d) the number of units that can be supported upon full
build-out; (e) absorption rates; and (f) expected gain on land sales are
forward-looking statements.

Such statements are based on current expectations and are subject to
certain risks discussed in this report and in our other periodic reports filed
with the SEC. Other factors besides those listed in this report or discussed in
the Companys other reports to the SEC could also adversely affect the
Companys results and the reader should not consider any such list of factors
to be a complete set of all potential risks or uncertainties.

Sale of ARS

On April 17, 2002, the Company completed the sale of Arvida Realty
Services (ARS) its residential real estate services segment, to Cendant
Corporations subsidiary, NRT, Inc. for approximately $170 million, which
includes payment for working capital of ARS at April 17, 2002 of
approximately $12 million,
in an all cash transaction. Accordingly, the results of operations of ARS have
been reflected as discontinued operations for all periods presented.

Results of Operations

Consolidated Results

Three Months Ended March 31

Operating revenues increased $35.4 million, or 41% to $121.7 million for
the first quarter of 2002 as compared to $86.3 million in the first quarter of
2001. Operating expenses totaled approximately $88.4 million, an increase of
$28.7 million, or 48%, for the first quarter of 2002 as compared to $59.7
million for the first quarter of 2001. Depreciation and amortization increased
$0.2 million, or 4%, to $4.9 million for the first quarter of 2002 from $4.7
million in the first quarter of 2001. The increase is due to additional
depreciation on buildings placed in service since last year. Included in first
quarter 2001 operations was goodwill amortization totaling $1.0 million.
Corporate expense increased $1.1 million, or 26% , to $5.3 million from $4.2
million, primarily due to the effects of increased employee benefit costs.
Corporate
expense included prepaid pension income of $2.4 million in the first
quarter of 2002, compared to $2.5 million in the first quarter of 2001.

Other income (expense) was $93.5 million in the first quarter of 2002
compared to ($0.1) million in 2001. During the first quarter of 2002, the
Company recorded pre-tax gains of $94.7 million ($61.6 million net of tax)
resulting from the settlement of a portion of its forward sale contracts. The
remaining forward sale contracts will be settled in 2002.

Income tax expense on continuing operations totaled $44.2 million, an
effective rate of 38%, for the first quarter of 2002 as compared to $6.7
million, an effective rate of 38% for the first quarter of 2001.

Discontinued operations includes the results of ARS and the gain on sale
and operations of two commercial office buildings disposed of in the first
quarter of 2002. Revenues generated by ARS in the first quarter of 2002 totaled
$63.7 million, an increase of 18% compared to $53.8 million in 2001. Operating
expenses for ARS for the first quarter of 2002 totaled $59.9 million, an
increase of 15% compared to $52.1 million in 2001. Net income for the first
quarter of 2002 for the discontinued operations was $2.0 million compared to
$0.1 million in 2001. Net EBITDA was $4.2 million in the first quarter of 2002
compared to $2.3 million in 2001. Revenues, operating expenses, net income and
EBITDA generated from the operations of the two commercial office buildings
sold were all less than $0.1 million for both periods and the net of tax gain
realized from the sale of the two buildings totaled $0.2 million.

Net income for the first quarter of 2002 was $74.4 million or $0.90 per
diluted share as compared to $11.0 million or $0.13 per diluted share for the
first quarter of 2001.

Results of Operations by Business Segment

Community residential development

Three months ended

March 31,

2002

2001

(in millions)

Revenues

$

63.4

$

39.2

Operating expenses

53.3

32.0

Depreciation and amortization

0.8

0.2

Other income (expense)

0.1

0.2

Pretax income from continuing operations

9.4

7.3

EBITDA

11.1

7.9

The Companys community residential development operations currently
consist of its residential development on land owned 100% by the Company, its
26% equity interest in Arvida/JMB Partners, L.P. (Arvida/JMB) and its 74%
ownership of St. Joe/Arvida Company, L.P. Arvida/JMB is recorded using the
equity method of accounting for investments. These two partnerships are
developing a total of approximately 20 communities in various stages of
planning and execution primarily focused in northwest, northeast, and central
Florida. The Company also formed two 50/50 joint ventures with an unrelated
third party to develop a residential community in Palm Beach county, Florida
and one near Tampa, Florida.

WaterColor, a coastal resort community in Walton County, Florida began
sales in March of 2000. St. Joe/Arvida is building homes and condominiums and
is selling developed homesites in WaterColor. The beach club, boat house,
WaterColor Inn and Fish Out of Water restaurant are now operational. Fresh
Daily, WaterColors local gourmet market opened in March. A casual lakeside
restaurant with family dining is scheduled to open early this summer.
WaterColor will eventually be a 1,140 unit beachfront resort and residential
community.

Approximately three miles east of WaterColor on about a mile of beachfront
property, WaterSound is being planned as an exclusive and secluded beachfront
community. Sales of homesites began at WaterSound in the third quarter of
2001. This community is planned to include 500 units. Sales of 81 beachfront
multifamily units designed by Graham Gund, are expected to begin this spring.
The Camp
Creek Golf Course, located approximately four miles east of WaterColor and
within one-half mile of WaterSound, opened in May 2001.

SouthWood is located in southeast Tallahassee, Florida. Plans for
SouthWood include approximately 4,250 homes and a traditional town center with
restaurants, entertainment facilities, retail shops and offices. Sales of
homes and homesites commenced in the second quarter of 2001.

WindMark Beach is a beachfront community located in Gulf County, Florida.
This 80-acre community currently under development will offer 110 homesites,
many of which will be beachfront. WindMark Beach will also offer a pool club,
several community docks and a conservation area accessed by boardwalks and
trails. Planning is also underway for further development at WindMark,
adjacent to WindMark Beach. The proposed community requires a DRI and is being
planned for approximately 1,500 units with a beach club and golf course.

SummerCamp, a new beachfront vacation community is located in Franklin
County, Florida. Planning and entitlements are underway to develop 499 units.

James Island is located in Jacksonville, Florida on 194 acres acquired by
the Company. At full build-out, the community is expected to include
approximately 365 housing units. With 77 units remaining, sales at James Island
are expected to be concluded in early 2003.

During 2001, sales commenced at St. Johns Golf and Country Club in St.
Johns County, Florida. This community is planned to include 799-units and an
18-hole golf course which opened for play in 2001. Infrastructure is now
underway on the second phase.

Sales commenced at Victoria Park, near Orlando, Florida in 2001. This
1,859 acre community will have approximately 4,000 residences built among
parks, lakes and conservation areas, as well as an 18-hole golf course.

Real estate sales totaled $56.3 million with related costs of sales of
$41.2 million during the first quarter of 2002 as compared to sales of $35.0
million in 2001 with related cost of sales of $24.9 million. Following is a
detail of activity by development (in millions):

Quarter ended March 31, 2002

Quarter ended March 31, 2001

Closed

Cost of

Gross

Closed

Cost of

Gross

Units (a)

Revenues

sales

Profit

Units (a)

Revenues

sales

Profit

Northwest Florida:

WaterColor

21

$

9.2

$

5.1

$

4.1

10

$

11.1

$

5.9

$

5.2

WaterSound

23

6.1

2.6

3.5









Summerwood

9

1.3

1.2

0.1

10

1.7

1.5

0.2

Woodrun

1

0.3

0.3



5

0.5

0.7

(0.2

)

SouthWood

30

4.5

3.1

1.4

13

0.8

0.4

0.4

The Hammocks

10

1.1

1.0

0.1









WindMark Beach

12

2.5

0.6

1.9









Other Bay County

1

0.1

0.1



Northeast Florida:

James Island

18

5.4

4.6

0.8

7

2.3

2.0

0.3

RiverTown









5

2.0

0.3

1.7

St. Johns Golf &
Country Club

24

5.1

4.2

0.9

25

1.3

0.8

0.5

Central Florida:

Victoria Park

10

1.5

1.3

0.2

3

0.2

0.2



North Carolina and
South Carolina:

Saussy Burbank

100

19.2

17.1

2.1

58

15.1

13.1

2.0

Total

$

56.3

$

41.2

$

15.1

$

35.0

$

24.9

$

10.1

(a)

Units are comprised of lot sales as well as single-family and multi-family
residences.

During the first quarter of 2002 there were 10 lots, 8 multi-family
residences, and 3 single-family residences closed at WaterColor. The average
price of a lot sold in 2002 was $279,500 compared to $518,000 in 2001. The
average price of a multi-family unit sale in the first quarter of this year was
$895,000 compared to $425,000 last year. There were 5 beachside multi-family
units closed this quarter with an average price of $1,150,000. The average
price of a single-family home this year was $660,000 compared to $569,000 last
year. Revenue and costs of sales associated with multi-family housing units are
recognized using the percentage of completion method of accounting.

Other revenues from the WaterColor Inn, other resort operations,
management fees and rental income totaled $2.3 million with related costs of
$4.1 million in the first quarter of 2002 as compared to $0.2 million in
revenues and $0.9 million in related costs in 2001. The community residential
development operations also had other operating expenses, including salaries
and benefits of personnel and other administrative expenses, of $8.0 million
during the first quarter of 2002 as compared to $6.2 million in 2001. The
increase in other operating expenses is due to increases in marketing and other
administrative expenses associated with new residential development.

Income from the Companys investment in Arvida/JMB was $5.2 million for
the first quarter of 2002, as compared to $4.0 million in 2001. During the
first quarter of 2002, the Company also recorded a loss from other joint
ventures of $(0.4) million. The community residential development segment
recorded no income from other joint ventures in the first quarter of 2001.

During the fourth quarter of 1999, St. Joe Land Company was created to
sell parcels of land, typically 5 to 5,000 acres, from a portion of the total
of 800,000 acres of timberland held by the Company in northwest Florida and
southwest Georgia. These parcels can be used as large secluded home sites,
quail plantations, ranches, farms, hunting and fishing preserves and for other
recreational uses. The Company also sells conservation land to government and
conservation groups.

Three months ended March 31

During the first quarter of 2002, the land sales division, excluding
conservation land sales, had revenues of $15.4 million, which represented sales
of 53 parcels totaling 9,439 acres at an average price of $1,632 per acre.
During the first quarter of 2001, revenues were $17.5 million from the sales of
40 parcels totaling 7,506 acres at an average price of $2,318 per acre.
Several large tracts were sold last year at higher prices per acre, which did
not occur this year. Gross profit resulting from land sales totaled $13.5
million or 88% of total revenue as compared to gross profit in the first
quarter of 2001 of $15.4 million, or 88% of total revenue.

Initial planning and entitlement activity is underway on three RiverCamp
locations across northwest Florida. RiverCamps are planned settlements in
rustic settings, envisioned as a one-to- two acre cabin site sold fee simple,
along with common properties including conservation areas.

During the first quarter of 2002, the Company sold 7,008 acres of
conservation land known as Sweetwater Creek Ravines in Liberty County, Florida
to the State of Florida for proceeds of $7.3 million for a gross profit of $6.2
million. There were no conservation land sales in the first quarter of 2001.
During the first quarter of 2002, a contract was signed for the sale of an
additional 500 acres of conservation land which should close in the second
quarter of this year.

Commercial real estate development and services

Three months ended March 31,

2002

2001

(in millions)

Revenues

$

23.3

$

19.5

Operating expenses

20.8

17.6

Depreciation and amortization

2.0

2.5

Other income (expense)

(1.4

)

(0.6

)

Pretax income from continuing operations

(0.9

)

(1.2

)

Discontinued operations

0.2



EBITDA

2.8

1.9

Operations of the commercial real estate development and services segment
include development of St. Joe properties (St. Joe Commercial), development
and management of the real estate portfolio of Flagler , the Advantis service
businesses and investments in affiliates, including the Codina Group, Inc.
(CGI), to develop and manage properties throughout the southeast. Until
October 9, 2000, the Company owned 54% of
Florida East Coast Industries, Inc. (FLA) and Flagler Development
Company (Flagler) is the wholly owned real estate subsidiary of FLA.

Rental revenues
generated by St. Joe commercial operating properties were $7.3 million during
the first quarter of 2002, an increase of 40%, compared to $5.2 million in the
first quarter of 2001. Operating expenses relating to these revenues were $2.5
million, an increase of 67% compared to $1.5 million in 2001. As of March 31,
2002, the Company had interests in, either wholly owned or through
partnerships, 19 operating buildings with 2.5 million total rentable square
feet in service, compared to 16 operating buildings with 2.1 million total
rentable square feet in service at March 31, 2001. The overall occupancy rate
at March 31, 2002 was 84%, compared to 85% at March 31, 2001. Approximately
0.3 million square feet of office space is under construction as of March 31,
2002.

Net operating income (rental revenues less operating expenses) from
commercial income producing properties owned by the Company and
management thereof is presented in the
table below.

Net Operating Income

Percentage

Three Months Ended March 31,

Net

Leased at

Rentable

March 31,

Location

2002

2001

Square Feet

2002

(in millions)

Harbourside

Clearwater, FL

0.3

0.4

147,000

85

%

Prestige Place I and II

Clearwater, FL

0.3

0.4

143,000

86

Lakeview

Tampa, FL

0.3

0.3

125,000

92

Palm Court

Tampa, FL

0.1

0.2

62,000

93

Westside Corporate Center

Plantation, FL

0.3

0.3

100,000

83

280 Interstate North

Atlanta, GA

0.3

0.4

126,000

92

Southhall Center

Orlando, FL

0.5



155,000

95

1133 20th Street

Washington, DC

0.6



119,000

99

1750 K Street

Washington, DC

0.9



152,470

96

Westchase Corporate
Center

Houston, TX

0.5

0.3

184,259

82

NCCI

Boca Raton, FL



1.2

310,000

(a

)

Tree of Life

St. Augustine, Fl

0.2



69,000

100

TNT Logistics

Jacksonville, Fl

0.1



99,000

71

Nextel Call Center

Panama City Beach, Fl

0.1



67,000

100

Other

0.3

0.2

$

4.8

$

3.7

(a)

These properties were sold prior to March 31, 2002.

Operating revenues generated from Advantis totaled $13.4 million during
the first quarter of 2002 compared with $14.0 million for the first quarter of
2001, a decrease of 4% due primarily to a decrease in brokerage revenues.
Advantis expenses were $15.4 million during the first quarter of 2002 compared
with $14.5 million in 2001, an increase of 6%. Advantis expenses include
commissions paid to brokers, property management expenses, office
administration expenses and construction costs. Management has recently
implemented a cost reduction program, the results of which are not reflective
in operations as of March 31, 2002. Based on the results of these cost
reduction efforts, as well as overall improving market conditions and several
pending brokerage transactions, Advantis performance is expected to improve
for the remainder of 2002.

In the first quarter of 2002, revenues from sales of land located in
Florida and Texas totaled $2.5 million and generated gross profit of $1.2
million. There were no such land sales in the first quarter of 2001.

The Company has investments in various real estate developments and
affiliates that are accounted for by the equity method of accounting. The
Company reported a net loss from these investments of $0.5 million in the first
quarter of 2001, compared to a net loss of $0.5 million in the first quarter
of 2001.

General and administrative expenses for the commercial group, which are
included in operating expenses, remained the same at $1.6 million for both
quarters. The Company also had management and development fees earned of $0.5
million in 2002 compared to $0.8 million in 2001.

Depreciation and amortization decreased by $0.5 million to $2.0 million.
Amortization of goodwill in the first quarter of 2001 totaled $0.6 million.

During the first quarter of 2002, the Company sold the two Park Center
buildings located in Panama City, Florida for a net of tax gain of $0.2 million
which is included in discontinued operations. The net operating income from the
Park Centers for 2002 and 2001 was less than $0.1 million.

Forestry

Three months ended March 31,

2002

2001

(in millions)

Revenues

$

10.3

$

9.3

Operating expenses

8.0

5.7

Depreciation and amortization

1.0

0.9

Other income (expense)

0.6

0.5

Pretax income from continuing operations

1.9

3.2

EBITDA

2.9

4.0

Three months ended March 31

Total revenues for the forestry segment were $10.3 million in the first
quarter of 2002, an increase of 11% compared to $9.3 million in the first
quarter of 2001. Revenues from the cypress mill operation, which was acquired
in the third quarter of 2001 were $2.0 million this year to date. Total sales
under the Companys fiber agreement with Jefferson Smurfit, also known as
Smurfit-Stone Container Corporation, were $3.3 million (175,000 tons) in the
first quarter of 2002 as compared to $3.9 million (182,000 tons) in 2001.
Sales to other customers totaled $4.9 million (191,000 tons) in the first
quarter of 2002 compared to $5.1 million (231,000 tons) in 2001. Sales per ton
to outside customers was higher this year due to more sales of higher priced
product such as sawtimber vs. lower priced pulpwood.

Cost of sales were $7.4 million, or 72% of revenues, in the first quarter
of 2002 as compared to $5.2 million, or 56% of revenues, in the first quarter
of 2001. The cypress operation contributed $2.0 million of cost of sales.
Cost of sales of sawtimber and pulpwood products increased to 65% of revenue
from 56% of revenue last year due to more sales with cut and haul costs being
incurred this year. Other operating expenses were $0.6 million in 2002 as
compared to $0.5 million in 2001.

Transportation
(In millions)

Three months ended

March 31,

2002

2001

Revenues

$

0.4

$

0.5

Operating expenses

0.7

0.9

Depreciation and amortization

0.4

0.4

Pretax income from continuing operations

(0.7

)

(0.8

)

EBITDA

(0.2

)

(0.4

)

Three Months Ended March 31

ANRR operating revenues decreased $0.1 million to $0.4 million in the
first quarter of 2002 as compared to 2001. ANRRs operating expenses decreased
$0.2 million to $0.7 million in the first quarter of 2002 as compared to the
first quarter of 2001 due to cost cutting efforts.

Pretax income from continuing operations was $(0.7) million for the first
quarter of 2002 compared to $(0.8) million for the first quarter of 2001. ANRR
operations may continue to operate at a loss unless ANRR is able to increase
the traffic on its railroad or significantly reduce the costs associated with
its operations.

Liquidity and Capital Resources

The Companys sources of cash are from its operations, investments and
other liquid assets, sales of land holdings, borrowings from financial
institutions and other debt. The Company uses cash for real estate development,
construction and homebuilding and the repurchase of the Companys common stock
and payment of dividends. The Companys real estate development is dependent
upon the availability of funds from operations, sales of land holdings, and/or
from the availability of funds under the Companys existing credit facilities
and future debt borrowings.

The ability of the Company to generate operating cash flows is directly
related to the real estate market, primarily in Florida, and the economy in
general. After a downturn in the immediate aftermath of September 11, tourism
in the northwest Florida region has rebounded primarily from drive-in markets.
Floridas economy in general continues to outpace the national average. Long
term prospects of job growth, coupled with strong in-migration population
expansion, indicate that demand levels should be favorable over the next two to
five years.

Management believes that the financial condition of the Company is strong
and that the Companys cash, investments, real estate and other assets,
operating cash flows, and borrowing capacity, taken together, provide adequate
resources to fund ongoing operating requirements and future capital
expenditures related to the expansion of existing businesses, including the
continued investment in real estate developments. If the liquidity of the
Company is not adequate to fund operating requirements, capital development,
and stock repurchase, the Company has various alternatives to change its cash
flow. The Company has no obligation to continue the repurchase program or
maintain it at any particular level of purchase, the Company may alter the
timing of its development projects and/or the Company may sell existing assets.

Through May 2001, the Companys Board of Directors authorized a total of
$500 million for the repurchase of the Companys outstanding common stock from
time to time on the open market (the St. Joe Stock Repurchase Program). On
December 6, 2000, the Company entered into an agreement with the Alfred I.
DuPont Testamentary Trust (the Trust), the majority stockholder of the
Company, and the Trusts beneficiary, The Nemours Foundation (the
Foundation), to participate in the St. Joe Stock Repurchase Program for a
90-day period. This agreement was renewed for two additional 90-day periods.
The last of these agreements expired on September 6, 2001 and has not been
renewed. As of March 31, 2002 the Company had repurchased 12,082,366 shares in
the open market and 4,001,400 shares from the Trust. As a result of activity
leading to the recent sale of ARS, the stock repurchase program was suspended
for most of the first quarter. During the first quarter of 2002, the Company
repurchased 78,000 shares. The Companys intention is to repurchase $150
million of Company stock over the course of 2002. The Companys spending to
repurchase stock is discretionary at the Board and managements direction.

Net cash used in operations in the first quarter of 2002 was $33.1
million. Included in cash flows from operations were expenditures of $64.1
million relating to its community residential development segment. Net cash
provided by investing activities in the first quarter of 2002 was $12.9 million
Included in cash flows from investing activities were capital expenditures of
$14.8 million, consisting of commercial property acquisitions and development,
hospitality development, and other property, plant and equipment.
Proceeds from sales of assets totaled $25.5 million. In the first
quarter of 2002, cash flows provided by financing activities was $20.4 million.
The Company secured borrowings, collateralized by commercial property totaling
$26.0 million during 2002. The Company expended $3.5 million in the first
quarter of 2002 for the purchase of treasury stock.

On February 7, 2002, the Company issued in a private placement, a series
of senior notes with an aggregate principal amount of $175.0 million (Medium
Term Notes). The maturities of the medium terms notes are as follows: 3 Year -
$18.0 million, 5 Year  $67.0 million, 7 Year  $15.0 million, 10 Year  $75.0
million. The notes bear a fixed rate of interest ranging from 5.64%  7.37% and
interest will be payable semiannually. The weighted average interest rate for
2002 is 6.89%. Upon receipt of proceeds, the
Company partially paid down its $250.0 million line of credit. The notes
contain financial covenants similar to those in its $250.0 million line of
credit.

The Company paid its $250.0 million revolving credit line down to a
balance of $15.0 million as of March 31, 2002 from proceeds received from the
Medium Term Notes. The $250 million credit facility matures March 30, 2004, as
amended on February 4, 2002. This facility will be available for general
corporate purposes, including repurchases of the Companys outstanding common
stock. The facility includes financial performance covenants relating to its
leverage position, interest coverage and a minimum net worth requirement and
also negative pledge restrictions. The Company currently has adequate coverage
under its financial covenants and is in compliance.

Net cash used in operations in the first quarter of 2001 was $24.1
million. Included in cash flows from operations were expenditures of $52.3
million relating to its community residential development segment.
Cash used in investing activities totaled $14.7 million and included proceeds
from sales of operating and investment property of $16.6 million and
expenditures of $26.2 million related to commercial real estate investments.
Other capital expenditures totaled $2.7 million and represent purchases of
property, plant and equipment. Cash flows from financing activities totaled
$26.8 million and included $76.8 million in proceeds, net of repayments, from
the Companys $250 million line of credit and purchases of treasury stock
totaling $57.4 million.

To finance the construction of certain on-site infrastructure improvements
at two of our projects, we have used community development district (CDD)
bonds. The CDD raises funds through the issuance of generally tax-free bonds
sold to investors. The principal and interest payments on the bonds are paid by
assessments on, or from sales proceeds of, the properties benefited by the
improvements of the bond offerings. The amount of bond obligations that have
been issued total $46.9 million at March 31, 2002, of which $20.7 million has
been expended. Although the Company is not obligated directly to repay all of
the bonds, we record a liability for future assessments which are fixed or
determinable and will be levied against properties owned by the Company. In
accordance with Emerging Issues Task Force Issue 91-10, Accounting for Special
Assessments and Tax Increment Financing, the Company has accrued $3.5 million
as of March 31, 2002 of this bond obligation.

The Company selectively has entered into business relationships through
the form of partnerships and joint ventures with unrelated third parties. These
partnerships and joint ventures are utilized to develop or manage real estate
projects and services. The partnerships and joint ventures are not consolidated
when the Company does not have control by voting rights and does not control
the major decisions directly or indirectly of the partnership, but are recorded
on either the equity method or cost method of accounting for unconsolidated
affiliates. The Companys employees do not benefit financially from these
partnerships although they may serve as officers or directors of these
partnerships. In connection with the operation of these partnerships and joint
ventures, the partners may agree to make capital contributions from time to
time. The Company believes that future contributions, if required, will not
have a significant impact to the Companys liquidity or financial position. At
March 31, 2002, six of these partnerships had debt outstanding totaling $132.7
million. The Company is wholly or jointly and severally liable as guarantor on
five of these credit obligations. The maximum amount of the debt guaranteed by
the Company is $100.1 million and the outstanding balance at March 31, 2002 was
$84.1 million.

Forward Sale Contract

The Company has entered into three-year forward sale contracts with a
major financial institution that will lead to the ultimate disposition of its
investments in equity securities. Under the forward sale agreement, the Company
received approximately $111.1 million in cash and must settle the forward
transaction by October 15, 2002 by delivering either cash or a number of these
equity securities to the financial institution. The agreement permits the
Company to retain an amount of the securities that represents appreciation up
to 20% of their value on October 15, 1999 should the value of the securities
increase. The securities are recorded at fair value on the balance sheet and
the related unrealized gain, net of tax, is recorded in accumulated other
comprehensive income. The Company recorded a liability in long-term debt for
approximately $111.1 million, which will increase as interest expense is
imputed at an annual rate of 7.9%. The liability will also increase by the
amount, if any, that the securities increase beyond the 20% that the Company
retains. On February 26, 2002, the Company settled a portion of the forward
sale by delivering equity securities to the financial institution. The
liability related to the contracts that were settled
was $97.0 million at the time of settlement and the resulting gain that
was recognized in the first quarter of 2002 was $94.7 million pre-tax, $61.6
million, net of tax. The balance of the liability, if held to maturity on
October 15, 2002 will be $38.3 million, plus any appreciation in the securities
beyond the first 20%. Under the forward sale contracts, if held to maturity,
the Companys maximum liability will not exceed the fair market value of the
applicable marketable securities.

The table below presents principal amounts and related weighted average
interest rates by year of maturity for the Companys investment portfolio,
mortgages held for sale and its long-term debt. The weighted average interest
rates for the various fixed rate investments and its long-term debt are based
on the actual rates as of March 31, 2002. Weighted average variable rates are
based on implied forward rates in the yield curve at March 31, 2002.

Expected Contractual Maturities

Fair

2002

2003

2004

2005

2006

Thereafter

Total

Value

$ in thousands

Equity Securities and
Derivatives

3,207











3,207

40,559

Long-term Debt

Fixed Rate

38,537

1,565

1,665

21,436

1,926

253,740

318,869

318,869

Wtd. Avg. Interest Rate

7.9

%

7.3

%

7.2

%

5.9

%

7.2

%

7.1

%

7.1

%

Variable Rate

15,011

17

31,048





4,000

50,076

50,076

Wtd. Avg. Interest Rate

3.5

%

5.9

%

6.9

%





3.6

%

5.6

%

As the table incorporates only those exposures that exist as of March 31,
2002, it does not consider exposures or positions that could arise after that
date. As a result, the Companys ultimate realized gain or loss will depend on
future changes in interest rate and market values.

The above tables
exclude contractual obligations, commitments and maturities of ARS,
which was sold on April 17, 2002.